Tax Brackets allow alliances to tax their member nation's revenues. The taxes are automatically deducted at each turn update.
Every alliance has a tax bracket called the Default tax bracket. The Default bracket is where new members are automatically placed when accepted into an alliance. The Default tax bracket cannot be renamed or deleted.
In order to view tax brackets and modify them, a member nation must have Bank Access permissions. These permissions are equivalent to the permissions necessary to Withdraw funds from the alliance bank.
When a tax bracket is deleted, any members remaining in that bracket are automatically transferred to the Default tax bracket.
Tax brackets cannot be used to drain money out of inactive nations, as Gray nations are not taxed anyway, regardless of what tax bracket they're in.